Dogs, Lions and Managers

Andrew Haldane, the Bank of England’s chief economist, claimed in a speech on March 20th at the London School of Economics that poor management is to blame for the UK’s weak productivity performance. He stated that while one per cent of UK businesses have achieved productivity growth of 6 per cent per annum, a third of businesses have seen no increase in productivity since 2000.

The UK’s disappointing productivity performance is due to a range of factors, but what specifically can be done to improve managerial performance?

Firstly, we need to strengthen competitive forces. Competition typically drives up performance. The Government’s industrial strategy should ensure that the Enterprise Act 2002 and the Competition and Markets Authority effectively promote competition in all sectors of the UK economy. The Government should benchmark the effectiveness of the UK’s competition regime in comparison to other OECD countries.

Secondly, we need awarding bodies and training providers to supply high quality training and qualifications for managers and leaders. The Institute of Directors and the Chartered Management Institute provide substantial qualifications for business leaders, but we need to do more. Awarding bodies, colleges and universities, should examine the potential for developing and supplying high quality post-graduate qualifications for managers and leaders which can be delivered efficiently, effectively and flexibly. Additionally, some of the proceeds of the Government’s Apprenticeship Levy could be deployed to create and provide high quality Management Apprenticeships at the vocational equivalent of degree and post-graduate level.

Leadership is crucial in determining results, improving productivity and achieving business success. For those of you with an interest in military history as well as management, the following observation by Napoleon will be of interest: “If you build an army of one hundred lions and their leader is a dog, in any fight, the lions will die like a dog. But if you build an army of 100 dogs and their leader is a lion, all dogs will fight like a lion.”